Tax Court Addresses Housing Allowances for Clergy with Two Homes
Driscoll v. Commissioner, 135 T.C. No. 27 (2010)

In 2010, the United States Tax Court ruled that a minister could apply a housing allowance to expenses incurred in two homes that he owned. The facts of the case and the court's ruling are summarized below.

Facts

An ordained minister was employed by a parachurch ministry. He owned a principal residence in Tennessee, and a second "vacation home" in the same state. At no time did he use either home for commercial purposes (i.e., as rental property). The ministry designated a housing allowance for him each year that he used for the payment of expenses on both homes, including mortgage payments, utilities, furnishings, improvements, and maintenance, such as lawn care, painting, and repairs.

The IRS audited the minister's tax returns for four years, and determined that the minister was not entitled for any of those years to exclude from taxable income the portion of his housing allowance that he used to pay housing expenses for his second home. The minister appealed to the Tax Court.

Log In For Full Access

Interested in becoming a member? Learn more.

View All
from our store
2020 Church & Clergy Tax Guide

2020 Church & Clergy Tax Guide

Find comprehensive help understanding United States tax laws as they relate to pastors and churches.
Managing Church Facility Use

Managing Church Facility Use

Find insights to equip your church to host members and strangers.
12 Law & Tax Guidelines for New Ministers

12 Law & Tax Guidelines for New Ministers

Essential knowledge to ensure legal and financial clarity and integrity in ministry.
Planning a Church Building Project

Planning a Church Building Project

Learn about zoning laws, property sales, church construction, financing, and more.

ChurchSalary

ChurchSalary

Experience a whole new way to set compensation. Eliminate the guesswork – get access to detailed compensation reports in just minutes.